Faye Lageu: 

Hello, and welcome to today’s ICMIF webinar, “Creating Value Through Embedding Sustainability at The Co-operators”. I’d like to introduce our two speakers for today from The Co-operators in Canada. One whom I’ve known for quite a while, Barb Turley-McIntyre, vice president, sustainability and citizenship. And also joining her is from a very different part of the organization, Andrew Yorke, vice president, corporate finance services. 

Andrew Yorke: 

Whether your organization is about to begin or has already begun its sustainability journey, this is a good opportunity to step back and see what The Co-operators has done and share our experiences. The Co-operators has been on its sustainability journey for over 10 years, and we’re recognized as a leader in our industry, and in Canada, and internationally. 

Barbara Turley-McIntyre: 

Then what we’ve learned and what I would say here today, is this is our story. It’s not the only way it needs to be done. In fact, that shouldn’t be the only way it needs to be done. But what we’re sharing with you is our journey. 

And what we found is that to really be successful on embedding sustainability, you need to have both commitment and innovation. So, it’s more than just coming up with a few new products and services. It’s about partnerships. It’s about collaboration. It’s about the governance of overseeing this. And what we found is that this is creating value for both the organization and its stakeholders. What we’ll show you today is that hopefully the relationship between the financial and the nonfinancial elements of our organization, and how that is evolved to create economic, social, and environmental value for The Co-operators. 

Andrew Yorke: 

So, just a quick overview of the agenda today. So, we’ll provide some background about our company and sustainability in general. Then we’ll walk you through The Co-operators journey and embedding sustainability into our organization. We’ll finish off with some closing messages. And hopefully there’ll be a chance for some questions at the end. 

So, a little bit about The co-operators. Just starting off in the middle there, we are a cooperative organization. We have 43 member owners, who have a 118 delegates to our seven regional committees across Canada. And they elect these our 22 member board of directors. 

We only operate in Canada. And our mission and vision is on the left there. So, our mission is to provide financial security for Canadians and their communities. And then you can see our vision there is to be a champion of their prosperity and peace of mind, a leader in the financial services industry, distinct in our cooperative character. And the last one there, I want to highlight, is a catalyst for a sustainable society. So, this is an example of embedding sustainability into our vision. 

And as mentioned, as we amended our vision back in 2010, it did feel a little bit like amending the constitution. It was a big change. But it was also a pivotal moment for us and resulted in this significant change to our vision. But we thought it made a lot of sense, given our values and given the cooperative principles, number seven is concern for community and the sustainable development of the communities in which we operate, and that we want to balance our economic goals and in the environment. It made a lot of sense for us. 

You can also see on the right there is just a little bit of background, which I won’t get into right now. We are an insurance company with about four billion of premium and about 5,000 employees, and 500 advisors across Canada. 

So, just to start off, I thought it would be good to highlight what are the business case benefits? Why does it make sense to embed sustainability into an organization? So, you can see that there’s a number of bullets there. One is that it reinforces our cooperative values. It directly supports, as I said, on the previous page, our vision and mission, and our values. We’ll also see that in many cases, it leads directly to a financial benefit of reducing expenses. 

So, implementing sustainability can also improve the bottom line. It enhances corporate reputation and brand. And then as we’ve also noted, it can be helped to recruit, engage and retain staff, and meet changing consumer expectations. We’re certainly seeing this currently in the political field. I know I just saw recently in Germany, the Green Party got more votes there. And the same thing is happening in Canada. So, it’s definitely a changing, it’s becoming a more and more important thing for consumers and employees. 

Innovation and products, and services. We’re seeing things like Tesla, Unilever are coming out with new products all the time. So, it can certainly enhance sales. Climate change, certainly means improved risk management. And it also helps us position ourselves as a leader on the topic. 

Barbara Turley-McIntyre: 

Great. I thought we might set the stage with what is sustainability. Because when we use this term, if you have five people in a room, they might have five different interpretations of what sustainability is. I think the important thing to think about here is that sustainability is not just about the environment. And that’s where many tend to go when they hear the term sustainability. So, I would look more to the broader language of ESG, environmental, social and governance integration. 

We’re seeing more and more now that shareholder, public companies, are actually starting to look more like purpose driven organizations. And if I think of co-ops and mutual in our foundation, that’s what we’re about. We were formed for a particular purpose that had social implications, as well as economic implications. So, I just think it’s important to keep in mind when we’re speaking about sustainability, we’re talking about the broader term. 

And how did we get started? And I know Faye Lageu, enjoys hearing this story. So, I’ll take a minute to tell it. It was at an ICMIF international meeting in Singapore back in 2007, when our then CEO, Kathy Bardswick heard from the keynote speaker at that event, Dr. Karl-Heinrik Robert, who was the founder of The Natural Step. And Kathy was there along with the chair of our board and one of our EVPs. And when she came back to Canada, she said, “I’ve found how we’re going to get our journey off the ground in a very strategic way. And that is by adopting The Natural Step principles.” And they have four principles. And just to show them to you quickly, three of them are environmental. So, it’s about the dig, the dump, and the degrade. And the fourth one is the social one around the demean. 

And what we found here is having a principle-based framework, really helped us be disciplined in moving our story forward. So, we thanked ICMIF for bringing Dr. Robert to that event. 

The other thing that I think is pointing out is the values in the journey. As one starts, or as an organization starts to go down this road, you don’t start normally at the number five. In fact, I’ve never seen that an organization just gets off the ground and all of a sudden they’re purpose driven under the ESG umbrella. But often it can be something like crisis management that starts you. It can be compliance. And then you move into resource optimization, market differentiation, and finally get to that purpose driven organization. 

So, what we’re showing here is a risk-based step process to the journey. I would say, and Andrew, I don’t know how you feel, but I would say that we’re somewhere where we’re still between four and five, right? Aiming to get to the top of five. And Andrew is nodding. 

So, we’re in agreement here. And then when you get to five, and we’re probably not in some ways far off, but in certain ways, what happens is it’s not a destination. The journey keeps changing. So, it’s not going to end, but the game is going on, if you can call it that. 

So, I thought you might be interested in our four phases. And we’ll go very briefly through these phases. And the four phases were number one was to get our own house in order. We felt that we couldn’t go out and start to engage others because they would turn to us and say, “So, what is Co-operators doing?” And we’d say, “Oh, we haven’t started, but we think you should.” So, that was the get your house in order. 

The phase two, we felt we were successful in starting the journey. And it was time to, as Andrew mentioned, we amended our vision to add in there, to start catalyzing for a sustainable society. 

And then in phase three, this is when the then CEO, Kathy Bardswick, called me into her office and said, “We’re no longer going to have a separate sustainability strategy that aligns with the corporate one, but we’re going to embed it.” And I thought, “Oh, this will be interesting.” And I have to admit I was a little taken aback and thought that was the demise of our department. Well, Kathy was right, it actually increased the engagement of our department. So, what we said was we wanted to embed sustainability in all areas of our business, including decision-making, actions and processes. 

We’re now in phase four. We’re continuing with, we call it Embedment 2.0. And we’ve also aligned our four year corporate strategy with the long-term 2030 SDG goals. 

We’re briefly going to take you through the different phases that we’re going through here. So, phase one, and we’ll just take a couple of highlights because in the 50 minutes we have, we can only go so deep. And if you have any questions, please, you can even ask today or send them to us later on. 

One of the things that Andrew and I would like to point out is that the governance structure is really been a good part of our reasons for our success. So, what we’ve got at the Co-operators and we’ve had since the beginning, is we’ve had the board of directors support. 

Over on the right hand side, you see Co-operators management group. That is our CEO senior management team. On the left-hand side, the board of directors has a dedicated standing committee, the sustainability and citizenship committee. In the middle of there, you’ll see a sustainability steering committee, that is a group of senior vice presidents from across our group of companies, representing areas, such as finance, claims, underwriting, facilities, strategy, really all the key areas of the organization. And then we do have a sustainability department. And of course, we have all our staff. 

What also helped move this forward was we started in 2012 to have bonusable compensation. So, at the CEO level is executive vice president team and all vice presidents, would annually have a sustainability/cooperative identity, bonusable goal. And this was really helpful because if you’re going to focus on it, having this as your guide, really proved then, well, it kept our feet to the candle, right? So, we would recommend some a governance structure as you go forward. 

Andrew Yorke: 

So, I spoke to the business case benefits of embedding sustainability. And the next two slides highlight some of the early wins during phase one. So, you’ll see the first slide here, it gets into the concept that Barb was mentioning of getting your own house in order. And so, on the far left there, you can see our 2010 baseline for our internal net carbon emissions. 

And to date we’ve been able to reduce our greenhouse gas emissions by 81% with the goal of being carbon neutral by 2020. And we’re doing this through a combination of increased renewable energy as you’ll see there in the green and purple boxes, but also internal initiatives, which we’ll touch on in several parts of this presentation. 

So, some of the early phase one activities that we did had to do with equal efficiencies that you’ll see on the slide here. The first one, again, is getting to the walk, the talk. So, at Co-operators, we have a fleet of cars with our vice presidents, and claim staff across the country. And we implemented a rule that you had to have a 10 liters per hundred kilometer, fuel efficiency across the organization. So, this is an example again, of where you can marry the finance with the sustainability. We expect that this has saved us over a million dollars to date. But again, it gets to the walk, the talk, if you’re driving around in a Hummer and telling people to reduce their consumption elsewhere, it doesn’t seem as authentic. 

Another area, which is an example of win-win for the consumer and Co-operators, and win-win for both financial and sustainability benefits, is in our e-docs program. So, we’re finally getting to the stage of having electronic documents available online for all of our clients. And again, this is an easy win for clients as well as ourselves. And we feel that we’ve been able to save by reducing paper consumption. And there are a lot of policy documents, as we know, we’ll know in the insurance industry, about 3.3 million over seven years. 

Now, we still have a lot of ways to go in terms of getting people. People are signing up, but not always moving to paperless as quickly as we want. There’s always the inertia. But I know if people are like myself, eventually we’ll get there, because anytime it’s offered to me, I want to get rid of those paper documents. So, those are two very practical examples of where we’ve had success in that first phase. 

Barbara Turley-McIntyre: 

Yeah. Maybe just to highlight some of the successes and challenges in that first phase. So, we developed our sustainability policy, strategy, and then our first sustainability reports during that period. We measured and began reducing the carbon footprint, speaking to the slide that Andrew just showed you. We launched a number of sustainability type products. So, we started to think differently about our approach. And then we did receive recognition in Canada as the number two corporate citizen, back in 2000, and I believe it was 10. Again, some successes there. 

But what were the challenges? And we’re being very honest here. Balancing competing priorities. When we launched this official sustainability strategy and policy back in ’08, it’s not like all the departments were saying, “When is sustainability coming on board? Bring it on.” So, we were kind of what I would say, pushing it out there at first. But gaining buy-in from some levels of Vps, as I mentioned before, we had that sustainability steering committee. And there were some VPs of certain departments that really got it. I would say climate change and the growing claims really helped in some areas such as our claims department, understanding the impact, and the financial impact on our organization, because of those weather related events. While there were some other departments who weren’t quite as sure as to whether sustainability was needed. 

And the push versus the poll in those early years, we were pushing ourselves. And when I say we, I really mean our department, the sustainability department at the time was pushing ourselves. You’re going to see in a later slide that that’s actually now the reverse. 

The top or the systemic issues beyond our direct control or gain, we can’t control all the world’s problems. And the challenge was avoiding reputational risks from greenwashing. So, when Andrew spoke about walking the talk, really important that we did walk the talk, and didn’t get caught in some sort of a media debacle. 

So, we’re moving on to phase two here. And this is where we started to catalyze for a sustainable society. I’m going to mention, this is a slide on our community investment and our staff engagement. In the early years when I first joined the corporate floor back in 2001, we had a very strong community investment program, but it was what I would refer to as a pay and spray. And I’m being a little glib when I say it, but we had a lot of money and we just sprayed it out to communities. So, we were there. 

But now what we’re doing, is we’re very much aligning our community investment, our corporate giving with our corporate strategy. So, an example of that would be, we have funded partners for action at one of the local universities in Canada, The University of Waterloo on a flood resiliency network. That is very much aligned to the work we’re doing with the increasing flood events in the country. And we’re convening through partnerships with this for a organization. 

We also work with Habitat for Humanity to build homes for those who are less fortunate, to give them really a leg up, if you want to call it that. So, we’ve moved our giving in that sense. 

Our employees have two days a year that they can volunteer at any organization of their choice. We don’t prescribe what it is. And so, that’s another way for us to give back to our communities. 

And another thing I’d point out here, and for those of you not from Canada, you probably haven’t heard of it. It’s called Imagine Canada. When you’re a member company, you would agree to commit to a minimum of 1% of pretax profit to Canadian communities and charities, and nonprofits. Typically, the mutuals and the co-ops go beyond this. So, you’ll see that chart where we’ve been somewhere around the four points, three, five, 6% over the last number of years. Again, showing that our commitment to communities is very strong. 

The next one is about the benefit of engaged employees and the cost saving. So, we have an annual survey that’s done externally. And 91% of our staff members last year, believe that the Co-operators Group of Companies is a socially and environmentally responsible organization. And we have 90% of our staff approximately responding to this survey. That’s a fabulous number to have. They really get it. We’re also a platinum best employer, and have been at that status for over 10 years. Again, another great indication of the way our employees view us. 

And what we’ve seen in the last few years is that employees, prospective employees are choosing us, not just because of our insurance jobs, but because of the kind of company we are. So, they will choose us because their values, and the values of us as a cooperatively structured organization align. They liked the way we’re going with our work on sustainability. They want to work for an organization that does more than just issue policies, but has an impact on society and on the environment. 

And the financial side of this is we have a lower turnover rate than the way the Conference Board of Canada has an industry benchmark of 8%. And we’re at 4.6. And if you do some of the math and the the finances behind it, we see that we’re saving or could potentially save about $2.4 million a year. So, there’s a saving, and we’re also bringing in the brightest and the best because they’re choosing to work with our organization. 

Andrew Yorke: 

That last point I could have done, right? 

Barbara Turley-McIntyre: 

That’s true. 

Andrew Yorke: 

Fine, perfect. So, if we get into 2013, this was a major turning point for Canadian insurers, when it comes to climate change and extreme weather events. So, while it may be difficult to say, individual weather events are due to climate change, we’ll see that emerging trend line and disturbing trend line is becoming clear later in the presentation. 

So, 2013 was the largest at that point in time significant catastrophic claims that we had in 2013. And you can see the pictures here. We’ve got pictures from Toronto. You can see the subway car inundated with rain. And you can see Calgary and the famous Calgary stampede grounds. There were completely underwater. And so, that economic event had an impact of $5 billion out in Calgary, and was on Swiss Re’s top 10 lists for that year. And left a hundred thousand Albertans out of their home. 

The item in Toronto there, as you can see was another billion dollar event just weeks later. And we incurred $43 million of losses ourselves, and the 300,000 people were affected in the greater Toronto Area. 

So, let’s move us into the next slide. And I’m not sure the exact point at which this change occurred, but water is now the largest peril the Canadian insurers are facing, surpassing fire now. And so, at this growing risk, and when we looked for operators, vision and mission to provide financial security to Canadians in the communities, we decided, how can we look at this from an opportunities perspective? So, if you look at the slide, we have the growing risks that we’re seeing, meaning more unmet needs. Because at the time there is no flood product in Canada. And this leads to more business opportunities. And we’re in the business of helping people manage risks. So, this just makes sense that we should be doing something in terms of, what new products can we offer? How can we adjust our brand? How can we play a role in advocating things? 

So, this leads to our next slide, which talks about some of the successes and challenges that we had during the phase two period. So, in in this period, we were the first insurer to sign the Montreal Pledge. For those of you who don’t know, the Montreal Pledge is a commitment by investors to annually measure and publicly disclose their portfolio carbon footprint. Again, this gets to walking the talk and authenticity. 

We also launched our flood initiative. And I’ll talk about this more in the next slide. We developed a sustainable investment policy and recruited an ESG advisor to our investment team on Identity Capital, which is our institutional investment arm. And they’ve now built this team for three to three to four full-time staff at this point in time. But we improved our staff engagement program on sustainability. And we also were recognized and ranked number one as the insurer globally in ESG, by Sustainalytics. 

As far as challenges, there are still competing priorities within the organization like many companies. And so, that’s an ongoing challenge to work with. Inconsistent internal applications, so some areas of the organization are on board. Some are not. Some don’t see it as part of their role. So, you’re still looking at improving the ability to embed it into the organization. And still having sustainability siloed as an individual department, as opposed to it being broadly inculcated into the organization. 

Well, this moves us into phase three, 2015 to 2018. And the big part of this phase was to embed sustainability in all areas of the business, including decision-making, action and processes. As I mentioned earlier, the key change of our 2015 to 2018 phase three strategy, was that we no longer had a separate sustainability strategy. Sustainability was now integrated into the corporate strategy. So, in effect, sustainability became the responsibility of all 5,000 plus cooperators staff and our advisors with the sustainability team acting as supporters and enablers. This had big implications as you’ll see on the next few slides. 

The two of the examples I’m most proud of, are on this slide. And that’s because they really get to the heart of our business, integrating sustainability into our business. So, we have the asset side, our investments, and the liability side, our underwriting. So, this is what we do. 

In 2015, we set a target of having between six to 10% of our consolidated investments in impact investments. And quickly for those of you who don’t know, impact investments, we refer to those as impacts that are impact investments have a market based return. So, they’re not philanthropy. And they measurably address environmental and/or social challenges. So, they have a positive impact. 

And as you can see, we were actually able to surpass our goal of 6% to 10%. And by the end of 2018, we’re at 13.2%. And we set a further goal to achieve, 20% in the future. 

On the underwriting side, as I mentioned earlier, Canada was the only G7 nation in the world, not having a flood protection for its citizens. And that’s now changed. We’ve played a big impact on that. And we rolled out and continue to roll out a flood product that will be made available to all Canadians. Others in the industry are also doing the same thing. So, we’re proud to have been a leader on this front. 

We look at our internal business operations. Another significant area of success was our business projects and initiatives, and the way that we manage these. So, we have what’s called an enterprise, it actually should be project portfolio office that does do the prioritization of the projects. And during this process, we’ll look at typical things such as a typical finance type things, such as net present value analysis, payback, detailed project costing and resourcing, and linking things to the strategy to make sure the projects make sense. And in line with this we’ve ensured that this link to strategy directly includes sustainability and cooperative identity. So, that’s built right into the business case. It’s not a separate process. Again, another example of embedding it into our operations. 

Barbara Turley-McIntyre: 

So, we’ve talked in the last few slides about the integration of sustainability into the corporate strategy. And once we had started to do that, it made sense to talk about moving from a separate sustainability report, annual group reports, and governance reports, into what we now call integrated reporting. It wouldn’t have made sense to go with integrated reporting before having an integrated strategy. And so, you need the horse before the cart, so to speak. 

So, in 2016, we delivered our first integrated report. This project, and I think this is significant was led by our CFO at the time, and the EVP of corporate services, where sustainability sits. Andrew and I, were two of the three project leads on this. So, for the first time we were moving four reports into one, and we were bringing together the financial and the nonfinancial values of the company into one publication. 

And sitting around the table, I certainly learned a lot from finance about really what are the numbers mean, what kind of a picture they paint. And I would say the finance side learned more about the area that we had worked in on the sustainability side. So, the idea of getting more integrated in our thinking, the reports certainly help that to go on. So, there was efficiency. There was departmental collaboration. And now what we have is this one annual report. 

The other thing that we started to do a lot more of in this phase three, was convening partners in advocating for change. So, members of ICMIF are either mutuals or cooperatives. And I think you’ll appreciate this. What we find with The Co-operators, is whether it’s politicians or even other businesses, they look to Co-operators with two hats on. One, we look at things through a cooperative lens. We have more of a long-term runway to take this look. And then secondly, as risk experts, right? We identify risks. We assess it. And then we transfer it as insurers. 

So, we play a big role here in Canada on working within a pre-competitive space. So, the example that I’ll go back to, and Andrew spoke about our flood product that we launched. Before we launched that product though, we convened really the industry and government in many ways on the topic. And we were seen as leading the flood dialogue in the country. 

And one of the terms used by one of the largest insurers in the country was we punched above our weight. And I said, “Excuse me, that’s kind of rude. What do you mean?” And what they said is, “Given the size of your company and the market share, you’re leading this dialogue and this most important topic of flood resiliency for the country.” So, you don’t have to be big and you don’t have to have the largest market share, but you need to be that respected voice. 

So, here you see a whole, what I would call the alphabet soup of some of our advocacy. I’ll just point out a couple of them. And some of you may be familiar with accounting for sustainability started by Prince Charles in the UK. The Canadian chapter got launched in 2016. And our CFO at the time was a founding member. And our present CFO, Karen Higgins, also sits on this group. And it’s a group of CFOs working for sustainability. 

Again, that’s a transition Andrew that I wouldn’t have seen five or six years ago, but now it is here. The important role that finance is playing in this space. 

The other one I’ll talk about is carbon pricing, leadership coalition. We’re part of a global group that believes you should price for pollution. How you put the price on carbon will be done within countries differently, but that you need to have a value for your pollution. 

We are members of the Principles for Responsible Investing. And then we’re also members or strong supporters of the Expert Panel on Sustainable Finance. Again, for those of you in the EU, you’ll be familiar with the work of the sustainable finance groups over the last number of years. Canada has been a little slower getting to the table, but we’re definitely at the table now, and pleased to play a leadership role. 

Andrew Yorke: 

I wanted to touch on some further trending and weather patterns that we’ve observed in the last four years. Unfortunately, we have a lot of pictures and these are all from different events to illustrate here. The most significant probably being the Fort MacMurray wildfire which gained global attention and forced the evacuation of almost 90,000 people from Fort McMurray in Alberta. This was a $3.70 billion event. And then was followed by further wildfires in 2017 in BC. 

We’ve also seen a number of water related events, whether it be hail, flood, or snow related across Quebec, Eastern Canada and Ontario, and Saskatchewan. And this has continued into recently into 2019, where again, we’re seeing flooding in areas of Montreal and parts of Ontario and Quebec. We also had it towards the end of 2018, an unusual tornado in our nation’s capital, which had wind speeds of up to 265 kilometers an hour. And had damages totaling $314 million. So again, while one weather event does not make a case for climate change in itself, we’re starting to see an increasing pattern that’s making a compelling case for change. 

what is this trending that I am referring to? As you can see, this is the pattern that is emerging worldwide. And as you can see under the title there, this is at 2018 prices. So, adjusted for inflation. In the blue bars show the insured losses. In the green shows the uninsured losses. And then you can see the trend lines in the red and the black. 

And unfortunately, what we’re seeing is the gap between insured and uninsured has been increasing over the last 25 years as is the trend in these types of weather related catastrophic events. So, the trend line to me seems unarguable. 

And if we look at our own country here in Canada, we’re seeing pretty much the same thing. It’s been increasing. And this is again coming from the Insurance Bureau of Canada. And this is insured losses. We’re seeing a trend pattern, which we’ve drawn in the red line there. And what’s particularly alarming to me is, and unfortunately, or maybe fortunately in line with us kicking off our strategy, is since then we’ve seen a real increase in almost every year is seeming to have more significant impact over the last 10 years. And so, this really shows the case of climate change having an impact. And so, where is this trend line going to go, is the big question. 

Yeah. And we thought, we’d share this with you. Although we don’t operate in the US, but we thought that this was a great example of how bad things can get. So, last fall, many of you may have heard about the California wildfires. And in fact there was a little town called Paradise, which seems odd to call it that, it actually burned to the ground. And in these fires, there were 85 deaths and 25,000 homes that were damaged. It was absolutely devastating. 

PG&E, which is California’s biggest power company filed for Chapter 11 bankruptcy. And recently the courts made a judgment that they were responsible for the fire. They hadn’t been keeping up with the upgrades that were needed to the system and the outcome was the fires. 

The other outcome, which I think is even maybe scarier, is the fact that one of the insurance companies was in financial ruins and was unable to pay millions of dollars to its policy holders. So, the effect of climate change and the increased claims, and weather events is something that I think we as insurers and in the financial institutions really need to keep a greater eye on. 

The other thing is the impact. So, we’ve been showing you, and Andrew had some great pictures there on the physical devastation that these events cause. But what about the social impacts? So, here you see, this is in Canada actually, after I believe it was the 2013 events in Alberta, where those hundred thousand people are out of their homes. And they’re basically living in gyms and arenas for weeks on end. 

And Larry Fink who’s the well-known CEO at BlackRock has been saying now that society is increasingly looking to companies with both public and private to address pressing social and economic issues. Again, five to 10 years ago, you wouldn’t have heard companies saying that they had to do anything that was beyond their core business of operation. So, I think it’s an important time for us. And I truly believe that co-ops and mutuals are well positioned to lead this. 

So, phase three, some successes and challenges. Well, we started with the integrated sustainability strategy. We introduced some new products and services, published our first integrated report, and picked up more recognition. And that’s not why we do it, but because we’re a leader in this space, we’re being asked for media for more interviews, more explanation of what we think the leadership issues are. That’s been very helpful to us. 

The challenges, well, the low hanging fruits been achieved. So, it gets harder now. There is low client awareness. Clients aren’t really sure about their vulnerabilities. The issue of climate change is so big that they really in a sense, closed down. So, how do we as share that message to meet our mission of financial security for Canadians and their community. There’s been a low sustainability product uptake. Inconsistent advisor engagement. These are agents in the field, how do we get them more engaged? 

And now the challenge is, we’re being pulled rather than pushing ourselves onto different areas of the company. And it’s not just sustainability. Finance is being pulled into the discussion. Strategies is being pulled in. Risk management is being pulled in. So, sometimes we’re the… What do you call it? The outcome is our own success, has been too great. 

And now we’re just going to move into the phase four and the final part of our presentation. And here is our 2.0 embedment of sustainability. This one is mine. Okay. 

So, what we’ve got on the left-hand side is our sustainability areas and how they support our corporate strategy. Our corporate strategy has four pillars, client engagement, co-op identity, competitiveness, what we call, create the future. And of course, underpinning all of this is our workforce capability. 

I had mentioned before that we also have 2030 long-term goals. And what we’ve done is we’ve selected nine of the 17 SDGs where we feel we have the greatest expertise and the opportunities for the most impact. And we have three goals, and they are to inform and influence, to incent, and to invest. 

And what we’re doing there on the left-hand side, as the number one, is we’re taking the four year strategy that we’re in now that is going to move us closer to meeting our 2030 goals. Then in the next four year strategy, and then the final four year strategy that ends in 2030, we should have met our 2030 goals. 

Andrew Yorke: 

So, an important thing that we’ve accomplished as part of phase four, is that our latest corporate strategic plan for 2019 to 2022, what you can see here, the most important takeaway is sustainability is integrated throughout. So, you can see the various areas of the strategy that Barb mentioned at the top. I’m not going to get into the items we’ve circled, but the important point is, is to the extent that it related to something on the sustainability front. It’s integrated right into our strategic plan. It’s not a separate document. And that’s to me a key of saying, “Hey, we’re really achieving the success and where we want to be in terms of building KPIs right into the plan.” 

Another big thing that has happened in phase four is TCFD or Task Force for Climate-related Financial Disclosures. I think this has become fairly well known. But just a quick bit of background, it was created by Michael Bloomberg as part of the initiative under the Financial Stability Board, which is chaired by our former Bank of Canada governor, Mark Carney. And it seeks to add disclosures into a company’s financial report around the areas of climate change risk, as it pertains to governance strategy, risk management metrics and targets. 

And so, this was another area in line with our desire to be advocates on this front, is we didn’t want to be a laggard in our own financial disclosures. And so, our CFO kicked this off, and ensured that we had a three-year plan to be fully compliant by the end of 2020. And we did our first disclosures in 2018. And we’ll look to build them out over the next three years. 

So, as part of this, we convened a team together from finance, governance, strategy, risk management, and sustainability. So, another example of bringing people together across the organization. And we’ll seek to improve our disclosures over time. And early successes that we’ve had, regulators reach out to us. We’ve been able to get onto some important organizations UNEPFI, for the insurance and asset management. Again, showing us punching above our weight. And so, we’re very happy with the successes so far on this front. 

Barbara Turley-McIntyre: 

And then on our final slide, we have a few final messages to share with you about our journey. And remember the journey goes on, right? It continues. So, the first one is overcoming early resistance. That was the push versus the pull kind of theory. 

And you have to be persistent if you’re going to move along because you will meet some resistance in the early days. And once you can start to demonstrate the value, then people start getting on board and the momentum builds. We feel that ensuring supportive governance framework is really critical to getting sustainability, to be embedded in your organization. 

Andrew Yorke: 

Getting CFO support, get this in place. It’ll be a lot easier to push sustainability and integrated across the organization as finance is involved in a number of things across the board. Sits on the executive team, interacts with the board, strategy. So, I think that’s a key element to ensuring success and integration. 

Number four there, is avoid reputation. You got to walk the talk. You got to get your own house in order. And that’ll reap benefits elsewhere. Doing this well, as we mentioned earlier, consumers and employees are almost demanding this. So, this allows you to attract and retain staff who get it. And you have to engage your staff and provide training. So, spreading the word, communicating and educating is very important. 

Barbara Turley-McIntyre: 

Right. And number seven, supporting the differentiation and creating competitive advantage. As you all know, we’re working within a space with publicly traded companies. We’re all trying to get a greater share of the market. And I think that the sustainability journey that we’ve been on, has really helped to differentiate it. 

And then the number eight, the punching above our weight, I believe that Co-operators has a very authentic leadership position. And this has truly helped us both with our government relations, with our staff relations, with community relations and leading talks such as building flood resiliency for Canada and bringing in new products, has really helped position us as a credible voice here. 

With that, I think we’ll stop. And thank you for allowing us to share our story with you. And if you have any questions, and Faye Lageu, I don’t know if we have time, but Andrew and I are both here to entertain them. 

Faye Lageu: 

Thank you very much, Andrew and Barb. We certainly do have quite a few questions that have come in. I’ve had to meld a few together, so that we can get as much answered as we possibly can in the time left now. One was just a quick clarification about your initiatives to reduce your carbon footprint. Was that actually described over phases one to three, or was it a different timeframe? 

Barbara Turley-McIntyre: 

We actually started in phase one. And the comparison we’re using now is with a 2010 baseline. So, I’m hoping that answers the question of the person who asked. But we did start to figure out what was our footprint with our buildings. As an example, across the country, we had audits done on the building to determine what our greenhouse gas emissions were. And then we came up with plans to reduce. And in the early years, we did some building retrofits. 

What we did find because we didn’t own our buildings and we still don’t own our buildings, is that we weren’t getting the benefit of any of these retrofits in terms of reduced costs on energy or reducing the greenhouse gas emissions. So, that’s when we started moving to the renewable energy as a means to do it. 

Faye Lageu: 

Okay, great. Thank you very much. That leads nicely into a question or a couple of questions about sustainable products actually, too. So, you mentioned about the flood insurance, which was has been a big one, obviously. Do you have any other brief examples that you could share of sustainability products, and maybe even give us a hint as to what the next big thing might be in sustainable products as well? 

Andrew Yorke: 

Yeah. I don’t know if we have the next big thing. Like flood was pretty big, obviously. Certainly resiliency services is something we see developing over time. How do you help those that are insured to manage their risk? Some of that will be partnerships, I think, with local government. But how do we help Canadian businesses be more resilient? So, I think moving from indemnification to resiliency services is another big area that’s a tough nut to crack over the next decade. 

Barbara Turley-McIntyre: 

And the other thing I’d to that, is that going beyond just creating a sustainability product. So, actually building sustainability attributes into existing products. One example I can give you is in a homeowner’s product, we have a comprehensive homeowner’s product. We built in a an endorsement that you can purchase, so that in the event of a claim, you can rebuild, repair or replace with environmentally friendly materials. Because today they still cost often somewhat more than traditional materials. And this endorsement will allow that to take place. 

Faye Lageu: 

Perfect. Thank you very much. And you mentioned just then Andrew, that more partnerships potentially with government would be beneficial. Are there other types of partnerships that are perhaps a little bit missing from your current ecosystem that you think would help drive more your embedding process more quickly? 

Andrew Yorke: 

I think there’s still more to come. And there’s none that are immediately coming to mind. I think, as we mentioned on an earlier slide, I think we have done a great job of building that out, across partnerships, across finance, across investments, across the academic community and the insurance industry. So, I think we’re doing a really good job so far, but I do think that there’s probably more opportunity out there. 

Barbara Turley-McIntyre: 

And the other one I bring in and Faye, you’re familiar with the organization, and some others on the phone maybe, the UNEP-FI organization, United Nations Environment Program Financial Initiatives, that has the three streams of bankers investments and insurers. And we find by collaborating with them globally, we learn a lot from particularly the countries, such as the EU who are ahead of us. But also within Canada, we get together frequently with the financial institutions under the umbrella of UNEPFI. And that’s a really good, safe space for us to work within. 

Faye Lageu: 

Great. And I’ll come back to that point, actually, when I wrap up. But final question around the commitment of senior management. You offered some really good advice on your closing slides there. So, to get to some nitty gritty, whether some detractors in the organization, and how did you manage them? 

Barbara Turley-McIntyre: 

Yeah, I’m chuckling. And I can remember in about 2010 having a conversation with my EVP at the time and Kathy Bardswick, our CEO. And just about this topic, Faye Lageu, there’s some detractors, not everybody is on board. That Barbara’s department is getting a bit of a bad name for itself. And I said to Kathy, “Do I keep my foot on the pedal?” And she said, “You keep your foot on that gas, because you’ve got the support of senior management. There are many within the organization that are on board, including our board of directors. Our staff are expecting us now. They’re bubbling up and wanting us to continue.” And so, for those detractors, it was, I would call it perseverance. And I think today, and I could be wrong, Andrew, but I don’t think we have those same resistors there today. 

Andrew Yorke: 

No, I would agree. I mean, I think the fact that you’ve had that CEO, CFO support has probably helped knock down barriers significantly over the last 10 years, to the point where, as you say, it’s just part of who we are now. It’s in our DNA. 

Faye Lageu: 

Wonderful. I said that was the last one, but I’m just going to chuck in one more killer question. If you could have the time over, is there anything that you would do differently or at a different pace or with different players? 

Barbara Turley-McIntyre: 

Yeah, there is one thing I would do. I would have realized hopefully, if I was doing it over again, that finance could have become a closer friend earlier. Because really, if you don’t have finance on board, you’re not going to get very far with this endeavor. You really need it. It’s the financial, and then the nonfinancials coming together. So, if I had to do it over again, instead of being fearful of finance and wondering what those, excuse me, geeks were doing with their numbers, I would try and befriend them and learn more about how we could work together. 

Andrew Yorke: 

I saw on a previous slide deck, Barb, that you had, accountants will save the world. I don’t know who you were quoting, but I’ll go with that. 

Faye Lageu: 

It’s a very good answer to our final question for today. Thank you ever so much to you both, for sharing your story with us. 

Barb, you mentioned during your presentation that you would be happy also to continue the conversation with anyone who wants to get in touch. And certainly that also applies with any questions that people might have about A4S, the SDGs, the TCFD, and lots of other acronyms. As I say, anyone who’s out there who wants more information, either from ICMIF or The Co-operators, please do just get in touch with us. We’ll be very, very happy to connect with you. 

So, a final, thank you very much to Barbara and Andrew. The final recording will be sent to everyone who has registered for the webinar today. But I think it’s the start of a very interesting conversation and we look forward to more. Thank you very much, everyone.

The above text has been produced by machine transcription from the webinar recording. ICMIF has made every effort to ensure that transcriptions are as accurate as possible, however, in some cases some text may be incomplete or inaccurate due to inaudible passages or transcription errors. Listening to or watching the webinar recording will allow you to hear the full text as delivered during the webinar but this is available in English only. Our transcriptions are provided to enable members to select the language of their choosing using the dropdown menu above.